How Colorado compares
Ranked against the other 49 states on the figures we hold. Rates that combine state and local components — sales tax, the minimum wage where it varies by region — are shown on this page but not ranked, because a single number would misstate them.
| Figure | CO | Nationally | In its region |
|---|---|---|---|
| PopulationUS Census Bureau, Vintage 2025 estimates, July 1, 2025 | 6,012,561 | 20th highest of 50 | 3 of 11 |
| GDP ($bn)Bureau of Economic Analysis, 2025 | 584.3 | 17th highest of 50 | 3 of 11 |
| Median household incomeUS Census Bureau, ACS 2024 1-year, 2024 | $97,113 | 8th highest of 50 | 4 of 11 |
| Unemployment rateBureau of Labor Statistics, LAUS (seasonally adjusted, preliminary), September 2026 | 4.1% | 31st lowest of 50 | 6 of 11 |
| Foreign-born shareUS Census Bureau, ACS 2024 1-year, 2024 | 10.6% | 18th highest of 50 | 5 of 11 |
| Property tax ratechecked Nov 2026; confirm with the Colorado legislature | 0.48% | tied 3rd lowest of 50 | 2 of 11 |
| Deposit return window (days)checked Nov 2026; confirm with the Colorado legislature | 30 | tied 15th lowest of 50 | 6 of 11 |
| Eviction notice (days)checked Nov 2026; confirm with the Colorado legislature | 10 | tied 13th highest of 50 | 3 of 11 |
| Final pay deadline (days)checked Nov 2026; confirm with the Colorado legislature | 6 | tied 21st lowest of the 29 states that set one | 5 of 5 |
- State income tax: yes41 of 50 states answer the same way
- At-will employment: yesthe same in all 50 states — it does not set Colorado apart
- Paid sick leave required: yes20 of 50 states answer the same way
- Paid family leave: yes12 of 50 states answer the same way
- Workers' comp required: yes49 of 50 states answer the same way
- Rent control permitted: no46 of 50 states answer the same way
- Annual report required: yes43 of 50 states answer the same way
Statistical figures: US Census Bureau, Vintage 2025 estimates (July 1, 2025) · US Census Bureau, ACS 2024 1-year (2024) · Bureau of Economic Analysis (2025) · Bureau of Labor Statistics, LAUS (seasonally adjusted, preliminary) (September 2026) · SBA Office of Advocacy, 2025 Small Business Profiles (2025). Tax, wage, business and tenancy figures are recorded from state sources and were last checked on 2026-11-05 — confirm anything you are about to act on with the Colorado legislature.
What's changing in Colorado
Enacted changes with a fixed effective date. Contracts, payroll and leases signed now may run past these dates.
Coming up
- January 1, 2027
Took effect in the last 12 months
Checked against official sources on 2026-11-05.
How long you have in Colorado
The periods that decide whether something is on time. Days are calendar days unless the underlying rule says otherwise.
- Return a security deposit within
- 30 days
- Eviction notice before filing
- 10 days
- Final paycheck within
- 6 days
- LLC formation processed in
- 1-3 business days
- Overtime starts after
- 40 hrs/week (12/day)
AI Legal Insights — Colorado
AI-generated · Updated July 2026
Colorado operates under a flat 4.4% state income tax and follows at-will employment rules, while also mandating paid sick leave up to 48 hours per year and a state-run paid family leave program. The state's regulatory framework balances business-friendly tax rates with robust worker protections, making compliance essential for employers.
With a $504 billion GDP ranking 16th nationally and over 620,000 small businesses, Colorado offers a vibrant entrepreneurial ecosystem supported by a low $50 LLC filing fee and a modest 0.48% average property tax rate. The state's relatively low unemployment (3.8%) and high minimum wage ($14.42) reflect a competitive labor market that attracts both talent and investment.
Approximately 10.2% of Colorado's population is foreign‑born, contributing to a diverse workforce that fuels sectors such as technology, agriculture, and hospitality. State policies, including access to driver’s licenses for undocumented residents and in‑state tuition for qualifying students, facilitate immigrant integration into the economy.
- ›Include explicit at‑will employment language to avoid implied contract claims under Colorado law.
- ›Specify accrual rates and carry‑over limits for paid sick leave to comply with the Healthy Families and Workplaces Act.
- ›Address Colorado’s flat income tax withholding requirements for both resident and non‑resident employees in payroll provisions.
AI-generated insights · Verify with a licensed attorney before relying on this information.
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Employment Laws
Colorado labor regulations
Colorado is an at-will employment state with some of the strongest worker protections in the Mountain West. The statewide minimum wage is $15.16/hr in 2026, adjusted for inflation each January, and rises to $15.71/hr on January 1, 2027; Denver sets a higher local rate. The Healthy Families and Workplaces Act (HFWA) requires paid sick leave for all employees, and the FAMLI program has paid family and medical leave benefits since January 2024. Overtime is owed after 40 hours a week or 12 hours a day.
| Law | CO Rule | Federal Floor |
|---|---|---|
| Minimum Wage | $15.16/hr (2026); $15.71/hr from Jan 1, 2027; CPI-indexed; Denver $19.84/hr in 2027 | $7.25/hr |
| Overtime | After 40 hrs/week, 12 hrs/day, or 12 consecutive hours at 1.5× rate | FLSA: after 40 hrs/week only |
| Paid Sick Leave | Up to 48 hrs/year accrued at 1 hr per 30 worked (HFWA); up to 80 hrs during a public health emergency | None (federal) |
| Paid Family Leave (FAMLI) | Up to 12 weeks of partial wage replacement (16 weeks for pregnancy or childbirth complications); funded by a payroll premium split between employer and employee | FMLA: 12 weeks unpaid |
| Workers Comp | Mandatory for employers with one or more employees | Federal employees: yes |
| At-Will Employment | Yes; exceptions include the Lawful Off-Duty Activities statute and public-policy claims | Default nationwide |
| Final Paycheck | Immediately if fired (within 6 hours of the next workday if payroll is closed); next regular payday if the employee quits | No federal deadline |
| Meal & Rest Breaks | 30-min meal break for shifts over 5 hrs; 10-min paid rest break per 4 hrs worked | Short breaks (20 min or less) must be paid; no meal break required |
| Equal Pay for Equal Work | Pay ranges and benefits required in job postings; salary-history questions prohibited | Equal Pay Act requires equal pay for substantially equal work |
- The Equal Pay for Equal Work Act requires employers to include compensation ranges and a general description of benefits in job postings and bans salary-history inquiries.
- FAMLI has paid benefits since January 2024, providing up to 12 weeks of paid leave (16 weeks for pregnancy or childbirth complications); lower earners receive a higher share of their wages, up to a weekly maximum adjusted each year.
- Colorado law protects employees from being fired for lawful activities off the employer's premises during non-working hours, with exceptions tied to the job; this does not protect marijuana use, which remains federally illegal.
- Colorado's overtime rule — after 12 hours in a workday, 12 consecutive hours, or 40 hours in a workweek — is more protective than the federal FLSA standard.
- Non-compete agreements are void except in limited cases, such as protecting trade secrets for highly compensated workers who earn above an annually adjusted threshold, and employees must receive separate written notice.
- The 2027 tipped minimum wage is $12.69/hr, with tips required to bring total pay up to the full minimum wage.
Sources: U.S. Department of Labor state minimum wage table · state labor agencies (checked Nov 2026)
Landlord-Tenant Laws
Colorado rental regulations
Colorado landlord-tenant law has become more tenant-protective since 2021. There is no statewide cap on security deposits, but stricter rules took effect January 1, 2026 (HB25-1249): deposits must be returned within 30 days (a lease may extend this to 60), deductions for normal wear and tear are barred, and bad-faith withholding carries treble damages. State law still prohibits local rent control. Most evictions now require a 10-day demand for unpaid rent, and the 2024 for-cause eviction law limits no-fault evictions.
| Topic | CO Rule |
|---|---|
| Security Deposit | No statutory limit on amount; tenants may request supporting documents, which the landlord must provide within 14 days |
| Deposit Return | Within 30 days (a lease may extend to 60) with an itemized statement; no deductions for normal wear and tear or pre-existing damage; treble damages for bad-faith withholding (HB25-1249, from Jan 1, 2026) |
| Rent Control | No rent control; state law prohibits cities and counties from enacting it |
| Rent Increases | At least 60 days' written notice for most tenancies; rent may be raised only once in any 12-month period |
| Eviction Notice (Non-Payment) | 10-day written demand for payment or possession for most residential tenancies before filing in county court |
| Eviction Notice (Lease Violation) | Written notice to cure or quit for most violations; a 3-day notice to quit with no right to cure for substantial violations such as certain criminal activity |
| For-Cause Eviction | Since 2024, most tenancies can be ended only for a listed cause; no-fault evictions generally require advance notice and relocation assistance |
| Habitability | Warranty of Habitability Act — landlord must maintain heat, water, electricity, and structural safety and respond promptly to written notice of problems |
| Retaliation Protection | Landlord may not retaliate against a tenant for reporting code violations, joining a tenant organization, or exercising legal rights |
Both landlords and tenants have enforceable rights under Colorado law. Document all communications and keep copies of your lease agreement. Use AI review to spot risky clauses before signing.
Starting a Business
Colorado LLC formation guide
Colorado is a low-cost state to form an LLC: the filing fee is $50 and the annual Periodic Report costs $25. The flat 4.4% income tax applies to both individuals and corporations. With about $584 billion in GDP and a highly educated workforce, Colorado is a strong base for technology, aerospace, energy, and outdoor recreation companies. The Office of Economic Development and International Trade (OEDIT) runs state incentive programs.
Step-by-step LLC formation
- 1Choose a business name — must include "LLC", "L.L.C.", or "Limited Liability Company"; check name availability on the Colorado Secretary of State business database
- 2File Articles of Organization with the Colorado Secretary of State online — processing is typically 1–3 business days
- 3Pay the $50 LLC formation fee online
- 4Designate a registered agent — must have a physical Colorado street address and be available during normal business hours
- 5Get an EIN (Employer Identification Number) from the IRS — free at irs.gov; required for banking, hiring, and state tax registration
- 6Register with the Colorado Department of Revenue for applicable taxes — sales tax, use tax, wage withholding
- 7File the Periodic Report each year with the Secretary of State — $25 fee, due during the window around your formation anniversary
- 8Open a business bank account using your EIN and filed Articles of Organization
- 9Check local licensing requirements — Denver, Colorado Springs, and other home-rule cities have their own business license and sales tax rules
- 10Explore OEDIT incentive programs for available tax credits, enterprise zones, and business development resources
Every LLC also needs a free EIN from the IRS (Form SS-4). Apply online at irs.gov — takes about 15 minutes and is required to open a business bank account.
Popular IRS Forms
Most-filed federal forms for Colorado taxpayers
Fill these out online with plain-English guidance — every field explained, no accountant required. Download as a ready-to-file PDF when done.
The main annual federal income tax return every taxpayer files.
Fill out free →Give your SSN or EIN to a client before getting paid as a contractor.
Fill out free →Report $600+ paid to independent contractors during the year.
Fill out free →Tell your employer how much federal tax to withhold from pay.
Fill out free →Report income and expenses from a sole proprietorship or LLC.
Fill out free →Report payroll taxes withheld from employees each quarter.
Fill out free →Get an automatic 6-month extension to file your 1040.
Fill out free →The year-end wage statement employers issue to each employee.
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Federal Offices
United States government offices in Colorado
Walk-in assistance by appointment only. Call (844) 545-5640 to schedule, or book online at irs.gov.
Immigration appointments via my.uscis.gov or call (800) 375-5283.
Free Legal Aid
Colorado legal assistance organizations
These organizations provide free or reduced-cost civil legal services to qualifying Colorado residents.
Statewide civil legal aid for low-income Coloradans
Free civil legal assistance for Denver-area residents
Housing and tenant legal services for low-income Colorado residents
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